Everyone has a plethora of credit cards, and payment by credit card has practically become the prevalent way of conducting daily transactions, whether online or in person, between buyers and sellers. On the one hand, carrying a wallet full of credit cards is inconvenient and poses risks of loss, theft, and fraud. On the other hand, online transactions, such as banking and shopping, are becoming routine or commonplace in today's society. A purchase online requires the purchaser to provide personal credentials and payment information. This practice leads to many concerns such as security, privacy, and anonymity due to personal information and payment information being transmitted over a network. For example, a merchant can share personal credentials such as addresses and emails with other business partners. Additionally, a merchant can also transmit unwanted advertisement information directly to the purchaser.
Payment also is a major issue in online transactions. One type of payment is using a credit card. A typical credit card purchase requires the purchaser to input the personal identification information in addition to a credit card number and purchase amount. The merchant receives this information and forwards the information to the merchant's bank. The merchant's bank attempts to obtain an authorization from the purchaser's bank. The purchaser's bank then authorizes the purchase for the amount and transmits an authorization code to the merchant's bank, which relays the authorization to the merchant. Upon receipt of the authorization; the merchant will approve the transaction. This is a direct payment to the merchant.
A second type of payment is using a cellular or mobile telephone as an electronic payment means. For example, NTT has developed a system that facilitates payment of certain goods by using a cellular or mobile telephone. This system is called the I-mode phone. The I-mode phone is a phone that allows the user access to the Internet and the Web. The phone sends emails or text messages, and provides access to a website. There are two types of websites within the I-mode system, official and unofficial sites. Official sites are the sites that have been approved by DoCoMo. These sites have a preexisting alliance or relationships with DoCoMo. Purchases from any “official sites” are automatically charged to the subscriber's monthly phone bill. Unofficial sites do not have a preexisting alliance or relationship with DoCoMo and purchases from these sites cannot be billed to the subscribers monthly phone bill. These sites have not access to DoCoNo's billing system. Payment would have to be made using credit card or other forms of payment.
Another system that allows for payment using a cellular or mobile telephone is Vodafone “m-pay” or “s-shopping”. Payments are charged to a monthly bill or deducted from a Pay As You Talk credit. Payment is authorized by a user name and password for Internet purchases and a PIN number for purchases. The m-pay service works by integrating a point of sale client into the merchant's e-commerce platform. This point of sale communicates with the Vodafone m-pay bill server to authorize payments and to initiate refunds for transactions.
The point of sale manages payment, authorization, and refund management. The Vodafone m-pay bill server manages consumer authentication, payment processing and response processing.
Both the Vodafone m-pay and the DoCoMo payment systems have limited applications. A buyer cannot use the mobile phone to pay for a transaction with a merchant that does not have an explicit pre-established business relationship with the buyer's specific phone operator. The systems will only work with merchants and content providers with explicit affiliations, i.e., official websites. Additionally, these systems have privacy and security concerns. Vodafone m-pay and the DoCoMo use an explicit public key management infrastructure. Furthermore, Vodafone m-pay system has a limit in the purchase amount.
However, there is a need for a system to enable a 3G-network subscriber to use a mobile device for daily transactions and payments without the limitations of the prior art. Specifically, there is a need for a system that ensures the privacy and anonymity of the 3G subscriber, and to protect that operator, merchant and subscriber against repudiation.